Canadian auto-parts manufacturer Magna International has lost out on some seriously handsome business opportunities in the span of one week. Reports were running rampant that Magna, based in Aurora, Ontario, was the top bidder for the Chrysler Group. DaimlerChrysler was already one of Magna’s largest customers, so the splitting of one conglomerate to make another seemed a ripe opportunity, no?
But as you’ve heard, Cerberus came out as the winner of that battle, and Magna was left to say, “We desire and support the solution that is best for DaimlerChrysler and the Chrysler Group, who are among our largest customers. Magna respects the decision reached by Daimler and is confident our long-standing and mutually beneficial relationships with Daimler and Chrysler will continue.”
That’s a really sweet thing for your spokeswoman to say when your feelings are hurt. Sadness. A Magna subsidiary in Austria, aptly named MagnaSteyr, has also suffered the hurting of many feelings at the hand of another big German. BMW has effectively cut 45% of MagnaSteyr’s automotive production by announcing that the next X3 will be built – by BMW – in South Carolina. MagnaSteyr has also been building two Chryslers, two Jeeps, two Mercedes and a Saab, as well as older Benz’s, VW’s, and Jeeps. Even Audi and Fiat have been clients.
To put it all into perspective, figure it like this. Belinda Stronach – Liberal Member of Parliament for Aurora; former cabinet member; former girlfriend of Canada’s current Foreign Affairs Minister; former candidate for the Conservative party leadership; twice divorced and at times considered to be the ladyfriend of one of hockey’s toughest men; and the former CEO of her father’s company – recently announced that her political run is coming to an end. Her father’s company, you say? Oh yes, that’d be Magna International. Belinda begins to concentrate on Daddy’s new opportunities, and things go about as well for her as it did for her party in the last election. Lose out on the bidding for Chrysler. Lose the manufacturing of a BMW. Lose, lose, lose, lose, lose. Ouch. Sadness. Feelings… hurt.
The positives: Magna shares rose this week in light of quarterly earnings reaching higher than the forecasters predicted. Magna sponsors a soccer team in the Austrian Bundesliga, FK Austria Wien, which was league champion in 05/06. The company has 81,000 employees. Magna assumes full ownership of New Venture Gear, to become Magna Powertrain, this year.
Every cloud has a silver lining. The X3 is not even close to being considered BMW’s best vehicle and Chrysler would have emptied Magna’s pockets of over $7 billion. It’s been a terrific day in the office, then.